BIR raps 69 tobacco traders for evasion

The Bureau of Internal Revenue headquarters on Agham Road in Quezon City. —INQUIRER PHOTO

The Bureau of Internal Revenue (BIR) on Thursday filed in the Department of Justice 69 criminal cases for tax evasion against traders of illegal cigarettes who were apprehended during raids conducted nationwide in January.

“The total exposure we have filed here now, including penalties and fines, amounts to P1.8 billion,” BIR Commissioner Romeo Lumagui Jr. told reporters.

In a statement, he said that the filing of cases was “a warning against illicit traders.”

“The BIR will not only raid your stores and warehouses, we will also file criminal cases against you. This will not be the last,” said Lumagui who added that they were also constantly surveilling businesses.

He warned erring operators that they would not only have to pay taxes with penalties and surcharges, but face jail time as well.

According to the BIR, the government was losing from the illicit tobacco trade between P50 billion and P100 billion in tax revenues which could have been spent on basic services, including the universal health care program and other national development goals.

The raids in January targeted 378 local cigarette stores and warehouses nationwide with cigarettes—either locally produced or smuggled into the country—that had fake or no BIR approved stamps.

According to the BIR, among the “hotspots” for illicit cigarettes were Zamboanga and Pampanga provinces.

Lumagui said that Marlboro, one of the most prominent tobacco companies in the world, was one of the brands being reproduced and smuggled into the country.

He added that the BIR was trying to locate the factories producing the illegal and fake cigarettes, including vapes.

Constant surveillance

According to him, “the BIR protects the Philippine economy by leveling the playing field. Everybody has to pay taxes. Traders of cigarettes, vape, petroleum and other goods subject to taxes have to register with the BIR and pay their taxes.”

“Failure to do so would force us to raid your stores and file criminal cases against you. We are in constant surveillance of your businesses. Not only will you have to pay your taxes with penalties and surcharges, but you will also lose your freedom,” he warned,

The yearly collection of excise tax on tobacco products fell by 9 percent to P160.23 billion in 2022 from P176.49 billion in 2021.

Earlier this month, Lumagui also warned sellers that pricing their products below the cost of production and excise taxes was prohibited.

At the same time, he warned smokers that products sold at prices below the minimum allowed meant the items were illegal.

The floor prices for cigarettes are pegged at P114.60 per pack and P1,146.00 per ream. In addition, heated tobacco products must be sold at at least P120.40 per pack; vapor products at P200 (2 ml) and P354.97 (4 ml), and a bottle of conventional freebase at P179.20 (10 ml) and P403.20 (30 ml).

Lumagui said in a statement that sellers offering products below these floor prices were not paying the proper taxes. —WITH A REPORT FROM TETCH TORRES-TUPAS 

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